Jaguar Land Rover Pick Up A Chinese

Jaguar Land Rover and China's Chery Automobile Joint Venture

As part of a 50/50 venture, Jaguar Land Rover (JLR) and China’s Chery Automobile are looking to not only build JLR vehicles but also new models "tailored specifically for the Chinese market" – and the Chinese market is said to be the world's biggest auto market.

From 2014 it will all take place at a factory the eastern city of Changshu near Shanghai, after months of delicate and intensive negotiations, finally won approval from Chinese authorities at the National Development and Reform Commission for the investment, estimated to be worth 10.9 billion yuan ($1.73 billion). Besides the vehicle manufacturing factory, the plant will also include an engine manufacturing plant and a research and development centre.

JLR CEO Ralf Speth and Chery CEO Yin Tongyao announcing the title of the collaboration as Chery Jaguar Land Rover Automotive Co said: "Together, we will now begin working in close collaboration ... to produce relevant, advanced models for Chinese consumers."

This is the first time that Jaguar Land Rover will be manufacturing cars outside the United Kingdom and the factory in China had its keystone-laying ceremony yesterday (Sunday.)

Dr Ralf Speth said: "For the first time one of the most famous names in the British automotive industry, Jaguar Land Rover, is poised to begin manufacturing in a market outside the United Kingdom. It seems only fitting that this new venture will take place here, in the People's Republic of China, the world's fastest-growing market for premium vehicles."

And, speaking to Sky News, Kay Francis, the company's director of global corporate communications, said: "The facility here in China will include research and development, engine plants and production lines. Start to finish, the cars will be made in China."

With the first vehicle manufactured there rumoured to be the Land Rover Freelander, Jaguar Land Rover are hoping to cash in on the Chinese current penchant for luxury goods, believing that their product is up there on the list, with demand not yet at a peak, even though it is already JLR’s largest market. This year alone, 20,000 Range Rover Evoques have been sold.

Building cars in China rather than importing them from the UK allows the company to avoid massive import duties, meaning that they can be sold for less and therefore be more attainable and plentiful when it comes to sales.

But what about the UK side of the operation? Does that not suffer as a result? Apparently not, according to Ms. Francis, as JLR insist that the Chinese expansion is in addition to their business in the UK and that no UK jobs will be lost as a result.

"Everything we do in China is in addition to our UK operation. We are not shifting production and it doesn't impact the head count and state of play of the plants in Britain.”

Jaguar Land Rover are actually a bit late getting into China, with VW having been there for 10 years already and Audi the choice of the political elite, but British brands are very popular there, and with an increasingly wealthy population to aim at they have high hopes.

"In our shared vision with Chery, this partnership will offer Chinese customers the latest generation models from Jaguar and Land Rover, as well as vehicles designed specifically for Chinese customers," Ralf Speth said.